EPISODE 2: Winning with Lease Accounting | Alec Wynne

Alec Wynne is a real estate broker who closed the biggest deal of his career by paying attention to something that many brokers skip. 

Find out his secret and hear what is giving him butterflies today.

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Transcript

SPEAKER_00 0:06

Alec Wynne is a real estate broker who closed the biggest deal of his career by paying attention to something that many brokers skip. Find out his secret and hear what's giving him butterflies today.

SPEAKER_01 0:19

We were able to show through lease accounting that we were able to positively impact the stock price about 10 cents a share. And that got the attention of the CFO and the CEO, who was a $140 million transaction. And for those of us that are in crush real estate, that's akin to winning the masters.

SPEAKER_00 0:41

Welcome to New Lee Song, where we talk about the latest and least accounting and least administration and share stories of changes in perspective and new beginnings. I'm your host, Matt Waters. Let's dive in. Alec, welcome to New Lee Song.

SPEAKER_01 1:04

Thanks, Matt. I'm glad to be here.

SPEAKER_00 1:06

Yeah, so glad to have you on, and uh I'll share a little bit about our backstory. You know, basically, Alec and I met for the first time teaching a class together. We taught a class live at the Cornette Global Summit. It is one of the pre-classes that people have to take. It's a required class for the MCR program, the Master of Corporate Real Estate. And the class is called Real Estate's Impact on Financial Statements. And uh Alec and I both love teaching, but when we taught that class for the first time together, Alec told a story. And Alec, I hope you'll humor me and let me talk you into telling that story again. But basically, it's about a time where Alec, as a real estate broker, closed a massive transaction based on accounting knowledge. If you would, just tell us that story one more time.

SPEAKER_01 2:00

Yeah, yeah. No, thanks, Matt. I don't mind sharing this story over and over again because it was very impactful for me professionally, personally. And like you say, it was it was the culmination of education that I had invested in. And when I was taking the very course that you and I are teaching, I a light bulb went on for me because I had been challenged with trying to get this very large company to move their headquarters. And I knew it was the right thing to do, but I was missing that magic sauce that would convince the CFO and the CEO that it was the right thing to do for their organization. And so after taking this class, I realized something that the CEO had been saying pretty consistently. If I had been listening, which I was with the right ear to the CEO, he was very concerned that in the previous 10 years, his company, this is a big financial services company, they were not able to get their stock price out of a certain range. And that range was about $14 to $18. It sort of sat in that range for about a decade, plus or minus a couple a year or so. And in any way, any event, one of his big big mandates for the C-suite was to figure out a way to get that stock price above $18 a share. So I filed that away. And then I also knew that they were having difficulty attracting talent. And so filed that away. And then the third, probably that one of the other bigger reasons for this move was that they were suffering from deterioration of brand. So even though they were headquartered in Denver and they were a global company, a lot of people didn't even know that they were headquartered in Denver who lived in Denver. So we sort of, you know, extrapolated on that. If people in Denver don't know you're located here, then you definitely have an issue with the elevation of your brand. So after taking this class, that was the last piece that I needed to figure out how to show the C-suite that if you were to move, you would have significant savings on your real estate because they didn't need as much space as they had. This was a 420,000 square foot uh headquarters that we squeezed down into 350,000 square feet. So just from the real estate alone, there was a significant amount of savings. And then in addition to in the transaction, we created a further savings. And so we were able to show through lease accounting that we were able to positively impact the stock price about 10 cents a share. And that got the attention of the CFO and the CEO. And I'll never forget this because it was about 2016 when I wrote the executive briefing with those three objectives in mind. Wrote a briefing, sent it over to the head of real estate. This was no uh Thanksgiving of 2016. He passed it on to the CFO and the CEO, and then in January, I got the green light to move their headquarters. It was still is the biggest transaction. I hope it hope it's not the last one because that was uh pretty fun to do. But yeah, it was uh it culminated into a move of about 1700 employees. It was a hundred and uh forty million dollar transaction. And for those of us that are in commercial real estate, that's akin to winning the masters in a as it which is a golf tournament, right? I mean, it it's a pretty big deal. So wow, I'm very honored to have been able to pull that off. But it came from learning lease accounting and uh you know certain things in that class that uh showed me how to message the transaction in the right way to the C-suite.

SPEAKER_00 5:39

Incredible. As I tell this story and retell it to people that work in the real estate profession, what does that do for you as a broker, as a real estate professional, when you close that size of transaction, how does that affect you financially? How does that affect your reputation?

SPEAKER_01 5:59

It impacts you in all those ways that you just mentioned uh financially. It it was to protect the integrity of the numbers, it was definitely a seven-figure commission. Uh, and that's one of the attractions to this crazy business, especially when you're on the brokerage side, because you're typically a 1099 professional. You know, you live on commissions and you make a living 100% on commissions. And so that's a daunting task as it is. So when you close a transaction like that, it gives you the ability to put significant money away uh for retirement. And it also gives you the ability to invest in uh commercial real estate, which is one of the things that we'll probably talk about later in the podcast. Because I have a big passion now for teaching the next generation how to build their own commercial real estate portfolio. Because the ultimate game plan, Matt, for me, it brokerage has always been a means to make a good living, but that's only where the story pauses for a second because the real end game is to build a portfolio that creates passive income. So I don't I don't have to rely on Social Security or you know things like that. And so so for me, it's about you know keeping my eye on that long-term goal. And when you close a transaction of this size, yeah, it gives you the ability to buy it. So I invested in two commercial real estate properties. And uh, since that was seven years ago, I have now parlayed that into two more and then parlay that into yet another. So I now have a portfolio of five commercial office properties, creating that passive income that I've always wanted to earn. So that's what it did financially, and then professionally, it puts you in a higher level in terms of how the corporate real estate community sees you as a professional when they see, wow, you handled the transaction from beginning to end of a move of a major corporation. This is a Fortune 500 company uh that had almost 2,000 people.

SPEAKER_00 7:56

Uh-huh.

SPEAKER_01 7:57

It really doesn't get any more complex than that. I mean, certainly there are some nuances that could have occurred uh in this transaction, but it was just pretty straightforward lease. So professionally, yeah, it puts you in a higher level in in terms of being able to advise other large companies. Should they move their headquarters, should they optimize their you know their headquarters, should they consider relocating their headquarters? So that's what it has done for me. Although many companies have not taken me up on moving their headquarters yet. So because it really has to be the right reasons and it and it has to be the right environment. I wrote the briefing at the perfect time with this particular C-suite. Now, I should mention that C-suite is entirely gone. So all of the folks that I did that transaction with are gone. And that's the other challenge in commercial real estate, is oftentimes the C-suite can change. Therefore, different folks have different agendas or different goals and objectives. And so you can write a briefing and it can go out the window the next day because the C-suite changes. So, you know, you have to be a master juggler, I would say.

SPEAKER_00 9:02

Yeah.

SPEAKER_01 9:02

As you navigate those waters.

SPEAKER_00 9:05

That's great. Yes. It's like all the things that you hear. Timing is everything. Location, location, location.

SPEAKER_01 9:12

Yeah.

SPEAKER_00 9:13

And when you need a little extra boost, who knows? Maybe lease accounting will help you get across the finish line, right?

SPEAKER_01 9:20

That's right. That's right. I love it. And I should mention Matt to your point about timing. I I didn't mention this in the summary, but I started the the transaction actually in 2011. That was the first time that that the discussion of moving the headquarters has started, but it wasn't until 2017 that I actually closed the transaction. So it took six years to close the transaction.

SPEAKER_00 9:41

Wow. Six years to become an overnight success, right? I love it. Yeah, that's great. That's that's such an encouraging story. I thank you for relaying it again, Alec. And so now shifting gears to your location uh as we speak. I think you're kind of going through a um a big move. And so yeah, love to hear about where you're moving from and to.

SPEAKER_01 10:08

Yeah, so I've got butterflies again, Matt. So after 30 years of working in the Denver market, I decided to expand our company further into the Phoenix market. So, and I did that strategically because I had been buying commercial property in the Phoenix metro area since 2017-2018. And then I just started really falling in love with the Phoenix area. I mean, just the the weather here is absolutely perfect, but for July and August, I know it gets pretty hot here in the summer. But outside of that, it's it's absolutely gorgeous. And then my family lives west, so it moves me a little bit closer to my family. But from a business standpoint, Denver and Phoenix are very similar. They're very similar markets, and so it's been a natural progression for me so far. I have clients here already, and so I've hit the ground running with two very large clients, and my expectation is that hopefully the next uh three to five years, we'll have a similar size office here in Phoenix. And that's really what I'm up to. So I didn't mention at the top that I'm I'm one of the three owners of Greenwood Commercial Real Estate. We're uh corporate services advisor firm based in Atlanta. Uh I run the West for the most part. So I was previously headquartered in Denver. And so I'll be obviously moving my headquarters, if you will, to Phoenix, but I'll still keep the Denver office running. So it's it's alive and well, and I'll be balancing uh both markets. So I'll be probably traveling back to Denver a couple times a month. Uh and then as my clients need me, of course, you know, I'll make those trips as the case may be. But in a nutshell, that's that's what my current um plan is is to um to grow this office uh for it to be at least on equal footing with Denver. But we'll see. You never know. I mean, you know, it could take off and be larger than Denver, but yeah, yeah, but the markets are very similar.

SPEAKER_00 12:02

That's great and and exciting, I know. You know, a fresh start is always, as you mentioned, like a little bit nervous, a little bit exciting. But yeah, I can I can feel the optimism and um and yeah, uh wish you all the success in the world in Phoenix.

SPEAKER_01 12:16

Yeah, thank you. It's it it's the good kind of anxiety, right? I mean, we tend to do our our best when we're pushed into a corner, and and not that this was I was pushed, I I pushed myself into this corner. So but I felt like at this stage of my life it was a calculated move, and but the butterflies are there and and I'm looking forward to seeing what the what the future will will uh bring toward us.

SPEAKER_00 12:38

Cool. So Alec, tell me, in the commercial real estate space, what do you think the hottest thing is right now?

SPEAKER_01 12:45

Pretty resoundingly, I would say, is artificial intelligence. But I've I'm maybe come at it from a little bit of a different angle because I think a lot of people talk about it because they're there's fear that it's gonna eliminate jobs and it's gonna change our industry. Yes, change is constant, change is real, changes in everything, and and it it is gonna change our industry. But the way we are looking at it, because we have a very consultative approach to our business, we're looking at it from the perspective of how can it help us be faster, smarter, better. And so I am constantly amazed at how fast the various tools within the AI toolkit is is learning and growing. And so we're putting in real case studies, and what comes back to us is amazing. It's as if, you know, there's another 30, 40-year-old veteran, you know, spitting back the responses to us. And in several cases, we have found that these agents will think of nuances or strategies that we didn't contemplate. And and it's okay, we don't take ourselves so seriously that we think we know all the answers. And I think that's why we're taking a different perspective in terms of how we look at AI. And so I would say that that is, yeah, absolutely the hottest thing in course real estate right now. And uh, we're just trying to keep a positive outlook on it. And so far I can tell you that it's working for us. Our our firm recently won two very large assignments that we've been told that the other big firms that I'll leave the names out of it, but the big firms that we were competing against, uh, we had shown brilliantly above whatever materials they had put in front of this particular client. And so if it's used in the right way, I think it can give you an advantage. And so don't be discouraged by it, eliminating jobs, because it will continue to eliminate jobs. But I would look at it from the the glass half-full standpoint and say to yourself, how can I use it to make me better and therefore serve my clients uh better faster? And I think that would be my advice to those that are tuning in is to yeah, don't be afraid of it, embrace it and figure out how you can use it to the best of your ability.

SPEAKER_00 15:05

Yeah. Oh, yeah. Great advice and completely agree. Yeah, appreciate your perspective on that for sure, Alec. And so now I'll tell you what, let's wrap it up with a uh podcast question because I know you have started a podcast as well. And and of course, we've got a um a lot of folks tuning in who like real estate related podcasts. So tell us about your new venture.

SPEAKER_01 15:29

Yeah, thanks, man. Yeah, so this is a is a big passion of mine for a number of reasons. That the things that we're trying to, I would say, elevate are really very simple. The first is to teach everyone how to build their own commercial real estate portfolio because oftentimes it could be very scary or daunting. Uh, not a lot of people know how to invest in commercial real estate. It seems to be too complex or maybe too expensive. I don't have enough to you know get in invested. But once we go through this journey with them and get them to understand, hey, you don't have to have a million dollars to buy or invest in a commercial property. You can syndicate, you can go along, go in a transaction with five or six family members and have a piece of a transaction. And so that is the sound bite that I want to share with all the listeners because one of the things that pushed me into that space was my mentor told me, hey, if you're gonna call yourself a real estate expert, you have to own some commercial real estate because it changes your perspective, not only as a investor, but also as a consultant advisor, because now you you start to understand the whole life cycle of real estate. And and by me doing that, he was exactly right. Uh, once I uh got through the first acquisition, I learned a ton, and then we carry that forward to the next acquisition and so forth and so on. And now I'm getting to the point to where I fully understand it. And and when you become a known proven commodity, then transactions or acquisition opportunities start to filter toward you. So that's the maturation process of real estate investing. But so that's the first objective of the podcast is to educate the audience on you don't have to be in commercial real estate. You could be an IT person, you could be an administrative person, you could be a someone in the legal field, a dentist, firefighter. It doesn't matter. If you have five or ten thousand dollars that you've saved up and you don't want to put it in the volatile stock market, and you want to put it into something that's a little more uh fixed, then this would be one way you can do it. And so that's um one of the tenets of the podcast. The second is to address the, and I'll just be very direct and transparent, to address the lack of diversity in the industry. And so uh that's been a big passion of mine. And I I always tell the story, you know, when I first started in Denver, you know, first of all, Denver is not the most diverse city, so I gotta, you know, qualify that coming there, but there weren't that many in the industry. And so in 30 years, there's only been a doubling of the number of people of color in the in the industry in Denver. I'm only speaking to Denver. But then when I launched Greenwood and we started to look at diverse talent across the country, we realized very quickly that there weren't that many in the entire U.S. So our mission is to really appeal to women and people of color because those are the you know the two uh groups of people that have been less represented in the industry. And so our objective as Greenwood, which the podcast is is an extension of, is to build the most diverse company in commercial real estate. That's our goal. So with that being part of our objectives as a company, my personal objective is I feel like I have a responsibility to help in that regard. So when we started the podcast, we we always make sure to tell people this is for everybody, irrespective of race, you know, color, and gender. But our goal is real simple. We just want to teach people how to create wealth through commercial real estate. And it just so happens that we have this platform uh that we can do it from. That's the reason for the podcast.

SPEAKER_00 19:14

Cool, awesome. So, what's the name of the podcast and where can we subscribe?

SPEAKER_01 19:19

I can put a shameless plug-in.

SPEAKER_00 19:20

Yeah, yeah, please.

SPEAKER_01 19:23

Thanks. Yeah, it's it's Brick by Brick Commercial Wealth. And we're hosted on YouTube, and uh, I think we have four we have four episodes up right now. We're working on the episode five as we speak.

SPEAKER_00 19:37

Awesome. Well, I'll be tuning in, and I'm I'm sure a bunch of our listeners here uh will join me. So I have to ask you one more question.

SPEAKER_01 19:45

Yes.

SPEAKER_00 19:46

On LinkedIn, just a little bit. I've documented a few personal goals. One of them is a bench press goal that I have, and I I found out through uh LinkedIn comments that uh in college, Alec, you you hit 315-pound uh bench press. I didn't know you're such a beast. Tell me about that story.

SPEAKER_01 20:08

Oh, yeah, yeah. Well, similar to you, I I had athletic goals, weightlifting goals, and I was always the scrawny kid growing up, and so for me, it was a it was a goal that I set for myself to see if I could get close to the football players, right? And going to a big university uh like UCLA, I mean that these guys are massive in in size, and so I I couldn't quite get to the levels that they were at, but at the time I was only 155 pounds, and I thought, can I really lift that much weight? And so first goal was 300 and then it became 315. I still remember when I did it, much like your video when I saw yours, you know, the guys in the room didn't think that I could lift it because I was pretty skinny when I did it. I actually I did two reps, actually. So I just because I'm that person, yeah. I have no so the second one was a lot harder than the first, but um but yeah, I did it and uh and I haven't touched it since, Matt. I probably can't get even 225 now, but wow.

SPEAKER_00 21:14

Well that that's impressive. I mean, especially at at that weight, right? 165 pounds. Yeah, I mean, you're you're near doubling your body weight. That's exactly right. Yeah, that is impressive. Yeah, well, Alec, always a pleasure talking with you again. Wish you much success in your new office and moving to uh to Phoenix and on the podcast. I'll be tuning in to Brick by Brick, and yeah, always a pleasure. Talk to you soon.

SPEAKER_01 21:42

Yeah, thanks for having me, man. It's always a pleasure talking to you.

SPEAKER_00 21:45

Thank you for joining us. I'd be grateful if you would like and subscribe wherever you listen. Perhaps today is your day to get a new lease on. Would you like to learn more about lease accounting? Check out the CGLA program. That's Certified Global Lease Accountant. You can earn 16 hours of CPE credit, study at your own pace, and earn the CGLA professional designation. Find out more at CGLA Institute.com.